CHEP and AISFeR show high efficiency in pallet management

Blue CHEP pallets maintain the uninterrupted processes of AISFeR and ensure reliability and safety

Uninterrupted supply of pallets in the required quantity and single high quality standard are of the utmost importance for the dairy producer AISFER. The 100% transition to pallet pooling provided by CHEP has reduced operating costs (by 20-30%), as well as reduced the environmental footprint of the business (the volume of waste generated has decreased by 77%).Uninterrupted supply of pallets in the required quantity and single high quality standard are of the utmost importance for the dairy producer AISFER. The 100% transition to pallet pooling provided by CHEP has reduced operating costs (by 20-30%), as well as reduced the environmental footprint of the business (the volume of waste generated has decreased by 77%).

Company

AISFeR is a vertically integrated Russian manufacturer of dairy products of the highest quality. The company uses innovative technologies at all stages of its production: in feed production, dairy farming and the production of food dairy products. The main product of AISFER is microfiltered milk (Pravilnoe Moloko brand), a unique product on the Russian market. This is the only milk in Russia produced using an innovative microfiltration technology that preserves the natural benefits and taste of fresh milk. The company also produces natural cottage cheese (Pravilniy Tvorog brand)  and cream milk (Pravilnie Slivki brand). Today more than 500,000 people in 51 regions of Russia are regular buyers of AISFeR dairy products.

Challenge

It is important for AISFeR to ensure a stable and uninterrupted supply of its products to retail stores, since the company's processes are built on the basis of a continuous closed cycle.
The production process begins at the black-earth fields Silver-Prudskoy district of Moscow region, where AISFeR grows feed for lactic cows living on their own farms next to the food supply. The milk of the highest quality obtained from the cows is immediately sent to the milk production plant, located 15 min drive from the farm. Upon arrival, the milk undergoes a series of mandatory tests to confirm its high quality, and then immediately goes for processing. Thus, all AISFeR dairy products are made from fresh milk of the highest grade, the quality of which is 100% controlled.
The production of natural dairy products, based on the daily receipt of milk on our own farm, requires uninterrupted supply of pallets, so AISFeR addressed to CHEP.

Solution

In 2019, AISFeR has switched to pallet pooling from CHEP. Now the "blue" CHEP pallets arrive just-in-time for production in a high single standard and maintain the uninterrupted processes of AISFeR, ensure their reliability and safety. In addition, pooling reduces the manufacturer's ecological footprint.

Blue pallets = lower operating costs

The transition to pallet pooling model allowed AISFeR to reduce its operational costs by 20-30%. Using white pallets, the manufacturer had to deal with the pallet administration, including its return from retailers. This approach is associated with the generation of additional costs:|

  • Up to 40% of returned pallets may differ in quality and do not meet production standards. As a result, the manufacturer spends up to 40 hours sorting pallets and selecting suitable ones for further use.
  • There is no system of accounting and control of regular returns.
  • Up to 20% of pallets are not returned from stores for a number of reasons. The manufacturer is forced to freeze part of the working capital to maintain a constant stock of white pallets, which results in a lost profit in the amount of at least the interest rate, or a missed opportunity to reinvest these funds in the business.
  • Pallet administration means maintaining multiple balances with different counterparties. Such accounting is not transparent and less efficient in comparison with the unified accounting system in pallet pooling.

Pallet pooling ensures business efficiency

After AISFeR full conversion to the pooling model provided by CHEP, 63k "blue" pallets circulates annually. They are shipped throughout Russia to 200+ locations every month. CHEP takes over the collection of pallets from AISFeR partners, accumulates them at hubs or CHEP service centers, cleans, repairs and inspects pallets, then returns them to circulation.

Thanks to pallet pooling AISFeR receives following benefits:

  • Stable pallet delivery schedule, which ensures the continuity of the production process;
  • Single standard and high quality of pallets ensure that the products on CHEP pallets will always be accepted by the retail chain;
  • The manufacturer does not need to check the pallets and organize additional storage space for scrap or poor-quality pallets;
  • Pallet accounting has become transparent and simple;
  • There is no risk of non-return/lack of pallets.

Benefits for the environment

CHEP pallet pooling allows not only to reduce operating costs, but also to reduce the ecological footprint of all parties involved. The first year of cooperation between AISFeR and CHEP has resulted in a significant contribution to environmental protection. Full conversion  to pooling model helped to halve the emissions of CO2 (56.1 tons), to reduce the volume of waste generated by 77% and save 72% more timber.

Learn more on how CHEP works

6 benefits of CHEP pooling solutions

Pallet pooling from CHEP will positively change your supply chain

  • Reliability

    Stable pallet delivery, which ensures the continuity of the production process

  • Single standard and high quality

    Single standard and high quality of pallets ensure that the products on CHEP pallets will always be accepted by the retail chain

  • Space optimization

    The manufacturer does not need to check the pallets and organize additional storage space for scrap or pallets of poor-quality

  • Transparency

    Pallet accounting and administration is transparent and simple

  • No risk

    There is no risk of non-return/lack of pallets

  • Sustainable solution

    More sustainable solution: only certified timber is used for CHEP pallets

2020 turned out to be a difficult year for most companies, nevertheless, CHEP has established itself as a reliable partner, ensuring uninterrupted delivery of pallets. We are proud that our collaboration is not only efficient in terms of supply chain, but also benefits the environment

Sergey Solomonidin Deputy General Director of logistics department, AISFeR

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CHEP and AISFeR Business Case